The liquidators of Suntech Power Holdings are to investigate the planned sale of the company’s main Chinese manufacturing unit to Shunfeng Photovoltaic International for possible legal breaches.
Representatives of PricewaterhouseCoopers, which was appointed in November to handle Suntech’s restructuring, said it was taking legal advice on the sale of Wuxi Suntech to Shunfeng following claims that the deal may not have been properly approved.
Since defaulting on a US$541 million bond earlier this year, Suntech has been fending off attempts by bondholders to recoup losses. The parent company has responded by applying for insolvency in the Cayman Islands. Meanwhile, the forced bankruptcy of its Wuxi subsidiary prompted the approach from Shunfeng, which has been provisionally approved by a Chinese court.
But last month liquidators in the Cayman Islands suggested the deal may be voidable because it had not been approved by Power Solar Systems, a Suntech subsidiary said to be the solar shareholder in Wuxi Suntech. PSS has been placed into liquidation in the British Virgin Islands (BVI), where it is incorporated.
They also claim that a transfer of shares from PSS to Wuxi Suntech of two other Suntech subsidiaries, Suntech Japan and Suntech Singapore, as part of the company’s internal debt restructuring, may be voidable as PSS may have already been insolvent under BVI law before the transfer happened.
In a statement today the liquidators said they were continuing their investigations into the share disposals of the Japan and Singapore subsidiaries and the proposed purchase of Wuxi Suntech by Shunfeng. They said they would take “such steps as may be necessary…to remedy any improper actions which have caused loss to Suntech PSS and their creditors”.
Sources quoted by Reuters news agency said the probe could delay the sale of Wuxi Suntech to Shunfeng.
But Shunfeng executive chairman Zhang Yi told PV Tech that the deal had the approval of the courts and Suntech Wuxi’s creditors and was now only awaiting approval from a general meeting of shareholders.
“Once completed, Wuxi Suntech will become a company with zero liabilities, a solar manufacturer without any liabilities,” he added.
A full report of PV Tech’s exclusive interview with Shunfeng Photovoltaic International chairman, Zhang Yi, will appear on Thursday 12 December.